Allied Technology Group, Inc v. United States

Appeal from the United States Court of Federal Claims in Case no. 10-CV-120, Judge Thomas C. Wheeler.

The opinion of the court was delivered by: Linn, Circuit Judge.

Before BRYSON, CLEVENGER, and LINN, Circuit Judges.

Opinion for the court filed by Circuit Judge LINN.

Dissenting opinion filed by Circuit Judge BRYSON.

This is a post-award bid protest case filed by Allied Technology Group, Inc. ("Allied") against the United States ("government" or "DOJ"), contesting the govern-ment's award of a contract for an internet job listing website to intervenor Monster Government Solutions, LLC ("Monster"). The Court of Federal Claims ("Claims Court") granted judgment on the administrative record in favor of the government and Monster (collectively, Appel-lees), affirming the determination by the Government Accountability Office ("GAO") that the award was proper. Allied Tech. Group, Inc. v. United States, 94 Fed. Cl. 16 (2010) ("Opinion"). For the reasons set forth below, this court affirms.

I. Background

A. DOJ's Request for Quotations

On August 13, 2008, the DOJ issued a draft Request for Quotations ("RFQ") for an automated recruiting and staffing system ("the System"), which performs the basic functions associated with the internet listing of DOJ job postings and the submission and tracking of applications submitted in response to the vacancies.

The draft RFQ contained a number of technical requirements that are discussed below in association with the final RFQ. In addition, it contained two provisions particularly relevant to Allied's protest. First, it required that "[t]he offeror shall highlight any provisions that conflict with the Terms and Conditions outlined in Document B [setting forth the substantive terms of the contract]. Conflicting provisions will be considered as exceptions to the Terms and Conditions of the RFQ." J. App'x 172. Second, it noted that "[t]he offeror is advised that any exceptions taken to the terms and conditions of the RFQ may adversely impact its evaluation rating. The Government reserves the right not to accept any exceptions to this RFQ." Id.

The draft RFQ provoked comments from potential offerors, including Monster and Allied. Allied objected to the provision that conflicting terms will be considered as exceptions, noting that "[t]his language does not allow for consideration of alternative terms that meet the agency's needs and suggest[s] that an offeror runs the risk of a proposal being found non-responsive if any terms in an offeror's standard MSA [(Master Subscription Agreement)] or SLA [(Service Level Agreement)] are highlighted as directed. This would be inconsistent with FAR [(Federal Acquisition Regulation)] 12, as noted above, and should be clarified."

The DOJ's final RFQ called for an "effective user-friendly web-based application" for initially handling about 11,000 employees, and capable of expanding to cover up to 115,000 employees as other sub-agencies converted to the system. The RFQ included four evaluation factors, listed here with their contribution to the total score: technical merit (60 points), live system demonstration (30 points); past performance (10 points); and price (discussed below).

Regarding price, the RFQ explicitly noted that "[t]he Government considers Technical Merit, System Demonstration and Past Performance factors, when combined, to be significantly more important than Price," but that the final award would be made on the basis of a best value determination, wherein "[t]he total evaluated price will be the determining factor for award where two or more quotes are considered substantially technically equal." If, however, "the Department determines that there are significant technical differences between the capabilities of two or more Offerors, then a more expensive quote may be selected for award where the DOJ determines that the value of the selected quote is worth the price differential."

The technical merit factor included a "Requirements List" detailing 114 technical requirements, each rated as "High," "Medium," or "Low" priority. Three high priority requirements are relevant here. First, the RFQ required that it take precedence over any other agreement between the government and the offeror. Second, the RFQ required compliance with Section 508 of the Rehabilitation Act of 1973, which guaranteed access to the System for people with disabilities under the FAR. The RFQ noted that the contractor "must comply" with the Federal Electronic and Information Technology Accessibility Stan- ALLIED TECHNOLOGY GROUP v US 5 dards set forth at 36 C.F.R. § 1194. Moreover, the RFQ required that a Section 508 Compliance Certification be signed by the contractor. Finally, the RFQ required that the System "shall use unique employee identifiers in lieu of social security numbers or other personally identifiable information."

Critically, the final RFQ noted that to be eligible, and offeror must "accept[] each of the requirements, provisions, terms and conditions, and clauses stated in all sections of this RFQ." The final RFQ also maintained the language from the draft RFQ objected to by Allied in a section titled "Part 4 -- Additional Documents," requiring that:

The Offeror shall highlight any provisions that conflict with the Terms and Conditions outlined in Document B. These documents will be reviewed by the Government. Any Terms and Conditions that are considered unacceptable by the Government and cannot be resolved may result in the Offeror being removed from consideration. Conflicting provisions will be considered as exceptions to the Terms and Conditions of the RFQ.

Further, the RFQ warned "that any exception taken to the terms and conditions of the RFQ may adversely impact its evaluation rating." The RFQ noted that "[t]he Government intends to make an award on the basis of initial quotation without the use of discussions. . . . However, the Government reserves the right to use discussions after receipt of quotations if it is considered in the Government's best interests to do so."

B. Allied's and Monster's Bids

Only Allied and Monster submitted bids in response to the RFQ. Both offerors submitted price plans for systems intended for between 5,000 to 115,000 users. The Contracting Officer evaluated the proposals at the initial anticipated user count of 10,000 to 15,000. Allied's proposed five-year price was approximately $7.0 million, assuming a 30 percent annual prepayment discount. Without the prepayment discount (as called for by the RFQ), Allied's price totaled approximately $11.7 million over five years. Allied's bid contained a section titled "Part 5 -- Exceptions." Allied stated:

[The] nature of the Avue Platform requires that the Avue MSA, signed with all clients, takes precedence over all other agreements/terms and conditions across our entire client base. As such, Section 18, Order of Precedence, needs to be removed from the BPA [("Blanket Purchase Agreement")] Terms and Conditions, leaving the MSA as the overriding document. The remainder of the exceptions outlined below flows [sic] from this change.

As described by the Contracting Officer, and not disputed by Allied, the exceptions resolve into the following:

* Allied's MSA would govern the confidentiality of data, the government's rights in data produced under the contract, and the rights of inspection and acceptance.

* Allied's MSA would require that "Any early termination of this Agreement shall not result in a refund or reduction of the Annual Subscription Fees and the Annual Extranet Fees for that portion of the subscription Period so terminated, regardless of whether such fees are paid on an annual or monthly basis."

* Relatedly, Allied would have the Initialization Fee paid up front to take advantage of the 30% discount reflected in its price quote, in conflict with the RFQ requirement that payments be made monthly in arrears.

Aside from these exceptions, it is undisputed that Allied's proposal met all the requirements of the RFQ.

Monster's proposal certified that it would meet all 114 technical requirements for a total five-year price of approximately $3.2 million. In particular, Monster indicated that its "system, training content, and its output" are compatible with Section 508 of the Rehabilitation Act, and also the privacy provision requiring the use of unique employee identifiers in lieu of Social Security numbers. Moreover, Monster submitted the required signed Section 508 Compliance Certification, certifying that its service is in compliance with the Electronic and Information Technology Accessibility Standards, 36 C.F.R. § 1194. In a section titled "PART 5. EXCEPTIONS," Monster included the following overview of its Section 508 compliance:

The information contained within this voluntary Product Accessibility Template ("VPAT") is the result of an independent audit . . . [that] tested the compliance of the Monster Government Solutions hiring Management -- Employer 5.0 ("HM -- Employer 5.0") application with the requirements of Section 508 of the Rehabilitation Act of 1972 as Amended (1998).

The DOJ established a technical evaluation panel ("the Panel") to evaluate the technical merit of the competing proposals. The members of the Panel scored each product for technical strengths and weaknesses under the criteria of the RFQ. The Contracting Officer received the scores from the Panel, and asked for further comments and descriptions from the members of the Panel. The Panel members then attended the live systems demonstration, and collected past performance scores regarding both companies' products. The Contracting Officer averaged the scores awarded by each member of the Panel for technical merit and the live demonstration and added the average to the past performance scores. The result was a total score for Allied of 85.5/100, and for Monster of

79.49/100.

On August 2, 2009, the Contracting Officer awarded the contract to Monster. In his later-issued memorandum opinion, the Contracting Officer explained his award decision on two independent bases. First, he determined that Allied's exceptions were "a refusal by Allied/Avue to accept material requirements, provisions, terms and conditions and clauses to the RFQ," and determined that ALLIED TECHNOLOGY GROUP v US 9 this made Allied's offer "unacceptable from a business standpoint." The Contracting Officer stated that "Monster took no exceptions." Second, and despite Allied's exceptions, the Contracting Officer compared Allied's and Monster's proposals on their merits because they were the only two offerors.

On the merits, the Contracting Officer determined that Monster provided the best value for the project, because Allied's "small technical advantage" could not justify the increased price: "There is no reasonable way to assert that Allied/Avue, receiving a technical score of

5.04% higher than Monster justifies paying more than twice as much, resulting in millions of additional dollars over the five year term of the BPA." The Contracting Officer further noted that because Allied's price was based on the DOJ taking advantage of a 30% up-front payment arrangement, the true price disparity between Allied and Monster was even more than 100%. At the end of his analysis, the Contracting Officer concluded that "even if ...

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